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US stocks surge on trade deal hopes, Dow up 1.4%

Wall Street stocks jumped early Friday on optimism for progress in US-China negotiations, including a possible agreement to pause new tariff measures.

The talks in Washington, now in their second day, were given a positive push by US President Donald Trump, who said the negotiations were “going really well” and was scheduled to meet later Friday with China’s top trade envoy Liu He.

Analysts also cited apparent progress in Brexit talks between the European Union and Britain following an upbeat meeting Thursday between British Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar.

About 15 minutes into trading, the Dow Jones Industrial Average stood at 26,859.34, up 1.4 percent.

The broad-based S&P 500 also gained 1.4 percent to 2,977.73, while the tech-rich Nasdaq Composite Index advanced 1.5 percent to 8,071.63.

Media reports this week have drawn the contours of a partial deal that, while not addressing Trump’s core grievances about China’s trade practices, would offer something for both sides.

China will continue to increase purchases of US farm exports and pledge to refrain from currency manipulation while Washington will suspend a tariff increase, Bloomberg reported.

Friday’s surge in stocks “goes to show just how anxious market participants have been about an escalation in the tariff fight,” said analyst Patrick O’Hare.

“They will accept any semblance of good news and cheer the ability to make it out of these trade negotiations without any knockout punches having been delivered.”

Source: Economic Times